Laurance Corporation issued P 400,000, 7%, 20-year bonds on January 1, 2017, for P 360,7217 This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annual on January 1, Laurance uses the effective interest method to amortize bond premium or discount. Instructions prepare the journal entries to record the following (Round to the nearest dollar) a. The issuance of bonds b. The accrual of interest and the discount amortization on December 31, 2017. c. The payment of interest on January 1, 2018.

Laurance Corporation issued P 400,000, 7%, 20-year bonds on January 1, 2017, for P 360,7217 This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annual on January 1, Laurance uses the effective interest method to amortize bond premium or discount. Instructions prepare the journal entries to record the following (Round to the nearest dollar) a. The issuance of bonds b. The accrual of interest and the discount amortization on December 31, 2017. c. The payment of interest on January 1, 2018.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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